NYC and Chicago remain most vulnerable markets 

Cities like New York and Chicago are known for their housing density — but they're also among the major metro areas most vulnerable to a downturn. A dozen quickly growing markets in California are also at risk, a new report from ATTOM finds. 

What makes a market vulnerable? To determine the health of an area's housing market, ATTOM researchers looked at issues like affordability, the number of underwater mortgages, home equity, foreclosures and unemployment. While national foreclosure activity has been relatively low in recent years, foreclosure filings have been climbing.

But perhaps more troubling are affordability issues. Home prices hit record highs this summer, and other housing costs, like property taxes and homeowners insurance, are also on the rise. That combination of factors could cause some homeowners to become upside down on their mortgages if home values drop. ATTOM noted that the counties on its list of vulnerable markets were worse off in these metrics.

Which counties made the list? Of the 51 U.S. counties ATTOM researchers considered to be most vulnerable, 24 were in the greater New York City and Chicago metro areas, and several were in mid-sized cities throughout California — all regions that have been in the "at-risk" category for some time.

The most at-risk counties in New York include Kings County, Richmond County and Bronx County. Additionally, Essex, Passaic, Sussex and Union counties in New Jersey — which are suburbs of New York City — also made the list. Counties around the Chicago area that were among the most vulnerable include Cook, Kendall, McHenry and Will counties in Illinois and Lake County in Indiana.

Twelve California counties made the list, including Butte, Humboldt, Solano, Shasta, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, Riverside and San Bernardino counties.

No imminent downturn: The report suggested that even in vulnerable areas, the housing markets are not in crisis — but they're worth watching. 

"While these observations don't indicate immediate red flags or warning signs of an impending downturn, they do highlight areas of relative risk," ATTOM CEO Rob Barber said in the report, adding that "it's crucial to closely monitor regions where key indicators suggest a higher likelihood of issues."

Which markets are least vulnerable? On the flip side, counties least at-risk for a downturn were spread throughout the South and Midwest, researchers noted. Virginia and Wisconsin each had eight counties that were deemed least vulnerable while Tennessee boasted five.